Mendip Renewables was established in 2015 as a community benefit society to acquire and operate a 5 MW solar farm in Somerset – Whitelake Solar Farm– and to distribute the profits generated by the scheme for the benefit of the community.
Whitelake Solar Farm is a ground-mounted solar scheme constructed on low grade agricultural land on Bagborough Farm – a dairy farm near the village of Pylle in Somerset – and Lower Easton Farm. For the last three years, Whitelake Solar Farm has been generating an average of over 5,200 MWh of electricity a year, enough to power the equivalent of around 1,460 homes.
Mendip Renewables has paid £49,000 to charity Key4Life in community benefit payments to date with a further £12,000 expected to be paid later in 2021. These funds have gone to Key4Life’s At Risk programme in Somerset and the South West, which helps young men at risk of going to prison to turn their lives around.
The bond offer
In 2018, Mendip Renewables raised £1.8 million through this platform to repay part of the finance used to build the solar farm. Shareholders who also funded the construction remained invested at that time, with the view that they would be offered an exit in three years’ time.
After consultation and approval from the 2018 bondholders, Mendip
Renewables is seeking to raise £500,000 through this bond offer. £300,000 will be
used to buy back the shares from the equity investors and £200,000 to pay down bonds
held by Triodos Bank who invested in the 2018 bonds via the Triodos Community
Renewables Underwriting Facility. If there is strong demand for the offer, an
additional £400,000 of bonds may be offered with any additional bonds repaying
the bonds held by Triodos Bank.
The new bonds will be issued on the same terms as the existing bonds except with a lower starting interest rate of 4.75%, increasing in line with the retail price index annually.
Mendip Renewables bonds are eligible to be held in a Triodos Innovative Finance ISA (IFISA). The IFISA is a type of ISA that allows you to hold crowdfunded debt securities such as this bond. As with all ISAs, there are eligibility criteria and you receive interest tax-free. ISA eligibility does not guarantee returns or protect consumers from losing their money.
To invest in Mendip Renewables’ bonds through a Triodos IFISA, select the ‘Invest through IFISA’ option. This selection will add to your current year IFISA or will open a new IFISA if you haven’t previously opened one.
Transferring an existing ISA
If you want to invest by transferring an existing ISA to a Triodos IFISA you must first request the transfer. You can do this under ‘Account’ once you’ve become a registered user of the platform. Your ISA transfer must be completed first, before you make an application for bonds.
Mendip Renewables Limited
£500,000, maximum £900,000
13.5 years, repayable in instalments with the final instalment scheduled for 31 December 2034
4.75% gross per year, increasing in line with the annual retail price index each year from January 2022. Payable in arrears on 31 December each year (paid net of UK basic rate tax unless held in an IFISA) with the first payment on 31 December 2021. Payment of interest and repayment of capital are not guaranteed.
Mendip Renewables has the right to repay the bond early in part or in full.
Second ranking security
The bonds are secured by way of a second ranking charge over the solar farm assets behind Triodos Bank’s first ranking charge. Asset security does not mean that capital or interest payments are guaranteed in any way. In the event of any wind-up or liquidation, Triodos Bank as senior lender will be repaid first and has full control in a default or enforcement scenario until it is repaid in full.
Bonds are transferable but are not listed on any investment exchange which means that bondholders will have to find a willing buyer and agree a purchase price with them, which in practice may not be easy. Investors should be prepared to hold the bonds for their full 13.5-year term.
A negative pledge regarding other borrowings until the bonds are repaid in full. This prevents Mendip Renewables from taking on any additional secured or other interest-bearing debt in that time.
£500,000. If less than £500,000 is raised, monies will be returned to investors with no accrued interest.
Closes on 31 May 2021, unless fully subscribed earlier or offer is extended. Bonds are allotted 15 days after close and investors start to accrue interest from that date.
Capital at risk warning
Past performance is not an indication of future performance. Capital is at risk and returns are not guaranteed. Investors should read the offer document in full, including the risks section, before deciding whether to invest.